1.

1 Introduction
The project proposed is to study the Working Capital Management at Tinplate Company of India Limited
standalone. With an aim to learn how TCIL manage his working capital. How they arrange capital for day to day
operation. How much working capital required for production. Major part of working capital requirement
companies get from bank, so bank have to follow certain norms in granting working capital finance to companies. The
norms of working capital financing followed by bank since mid-70s. And these norms are made by some committee
recommendation to strength the procedures for working capital finance by banks. Some of major committees are
Dahlia, Tandon, Chore committee. Project contains the credit policy of TCIL and inventory management system taken
by the company. The study is also covers how much working capital demand affect the operation and are they facing
time lag to get funds.
The role of iron and steel industry in India GDP is very important for the development of the country. In India the
visionary Shri Jamshededji Tata set up the first iron and steel manufacturing unit called Tata iron and steel
company, at Jamshedpur in Jharkhand. Iron and steel are among the most important components for the infrastructure
development in the country. The Indian steel sector enjoys advantages of domestic availability of raw materials
and cheap labour. Iron ore is also available in abundant quantities. This provides major cost advantage to the
domestic steel industry.

1.2 MARKET SIZE

Steel production capacity of the country expanded from about 75 million tonnes per annum (MTPA) in 2009-10 to
about 101.02 million tonnes (MT) in 2013-14, when output was 81.7 MT. India produced 7.07 MT of steel in
January 2015 reporting the fourth highest production level globally which was 1.7 per cent higher than the country's
steel production in the same month last year. The steel sector in India contributes nearly five per cent of the country’s
gross domestic product (GDP) and employs over 600,000 people. The per capita consumption of total finished steel in
the country has risen from 51 Kg in 2009-10 to about 60 Kg in 2013-14.

1.3 GROWING AT A FAST PACE

Total crude steel production rose at a CAGR of 7.9 per cent over the last five years to reach
1
81.54 MT in FY14. Finished steel production increased 8.3 per cent to 85.0 MT in FY14; analysts expect
production figures to improve rapidly. Over the next five years, with the Ministry of Steel forecasting production
levels at 115.3

MT by FY17. SAIL is the leader in India’s steel sector; in FY14, the company accounted for 12 per cent of the
country’s finished steel production and 16.7 per cent in the country’s crude steel production. Tata Steel, another
household name in the country, leads private sector activity in the steel sector. During 2014, the firm accounted
for 9 per cent of finished steel production and 11.2 per cent in the country’s crude steel production. India is the fourth-
largest steel producer in the world, and is expected to become the second largest by 2016. The government has
stepped up infrastructure spending from the current 5 per cent of GDP to 10 per cent by 2017, and the country is
committed to investing USD1 trillion in infrastructure during the 12th Five Year Plan. Considering 15 per cent as steel
component in the total investment, the initiative has a potential to generate an additional demand for steel of
18.75mtpa.

2
THE TINPLATE COMPANY OF INDIA LIMITED

A TATA Enterprise

3
 COMPANY PROFILE
TCIL is today the largest indigenous producer of tin coated and tin free steel sheets in India, enjoying 35-
40% market share and undoubtedly the industry Leader for more than 90 years. The company exports about
20-25% of its production directly to end-users (canmakers) and its products are well accepted in the markets
of SE Asia, Middle East and some developed countries in Europe.

Headquarter in Kolkata; the Company’s Works is located at Jamshedpur, Jharkhand. There are presently 11
offices in India and a distribution network with 16 stocking points.
TCIL Works, situated at Golmuri, Jamshedpur has presently two Electrolytic Tinning Lines (ETLs) and
Cold Rolling Mills (CRMs).
The Company is in the business of manufacturing and supplying reliable, cost-effective, value-added tin mill
products. It manufactures various grades of Electrolytic tinplates, tin free steel sheets and Full Hard Cold
Rolled Sheets (FHCR) used for metal packaging.
In pursuit of its downstream agenda, the company has been bonding with food processors and fillers by way
of world class printing and lacquering facilities at the "Solution Centre".

3.1 COMPANY OVERVIEW

The company was incorporated in 1920 and the site chosen was Golmuri, Jamshedpur. The first steel plate
of Tinplate gauge was rolled on 18th Dec 1922 at the Hot Dip Plant (HDP) producing Hot Dip Tinplate,
from tin bars supplied by Tata Steel and this continued till 1979 albeit with capacity enhancements. For 50
years, TCIL thus almost singlehandedly built up the Indian Tinplate Industry.

4
To keep pace with technological developments, TCIL was the first to set up a combination line capable of
producing both Electrolytic Tinplate (ETP) and Tin Free Steel (TFS). This plant, the first of its kind in
India, was commissioned in 1978 and commenced production in January 1979. In 1982, Tata Steel
bought the shareholding of Burmah Oil, the then major shareholder and took over the management of the
company.

In 1991-92, TCIL undertook backward integration to setup a Cold Rolling Mill (CRM) for production
of TMBP Coils, based on Hot Rolled Coil supplies from Tata Steel, which was also setting up its Hot Strip
Mill (HSM) at the same time. The CRM was thus a strategic fit for TCIL with Tata Steel. The Cold Rolling
Mill (CRM) was commissioned in 1996-97 but with heavy time and cost overruns, the company started
incurring severe losses. A turnaround strategy was developed focusing on:

5
  Financial Restructuring
 Operational Improvements
 Hot Dip Plant(HDP) phase out and downsizing

Since April 1998, TCIL operates under a conversion arrangement with Tata Steel for its business and
with its continuing yearn for quality and customer service, looks forward to the future with confidence.

Company Tinplate Company of India Ltd. (TCIL)

Established 1922
Chairman Mr. Koushik Chatterjee
Managing Director Mr. Tarun Daga
Industry Mining/Minerals/Metals
Headquarter 4, Bank shall Street, Kolkata
Works Golmuri, Jamshedpur, Jharkhand
Product Range Oil cans (OC)
Non-oil cans (NOC)
Open Top Sanitary Cans (OTC)
Tin-free Steel
Auditors Price Waterhouse (301112E)
BSE Code 504966
NSE Code TINPLATE
F.V. of Share Rs10

TINPLATE COMPANY of INDIA LIMITED

3.2 Introduction

Tinplate is a packaging substrate and is one of the most suitable substrate for processed foods owing to its
physical and metallurgical properties vis-à-vis other alternates (glass, paper, plastic, aluminum, tetra pack).
Tinplate, a value added flat steel product, evokes trust in steel since it is ideally suited for packaging
processed edibles: approx. 65-70% of global tinplate consumption is for processed foods and beverages.

The world is today grappling with environmental concerns and packaging waste is a major cause of concern.
Tinplate is the most eco-friendly packaging media and in the developed world has played a major role in
facilitating growth of processed foods and beverage industry, ensuring protection, improved shelf life and
aesthetics/ shelf appeal to promote brand equity of the product packed inside, better than any other media.

6
3.3 Global Tinplate Business

Worldwide packaging industry growth is dependent on the rate of economic growth of a region/country.
The growth at relatively higher rates in emerging economies of BRICS and ASEAN as compared to
developed economies (Europe, USA, and Japan) will ensure that Asian markets will be the prime driver of
growth. The global Tinplate market is estimated to be 15 million Tons. Although main consumers have been
developed nations in Europe, US, Japan (consuming nearly 73% of world Tinplate), off late,
increasing production/consumption is noticeable in developing economies like Brazil, India, China and
Mexico etc. Moreover increasing labor costs have put Europe, USA, and Japan in a comparatively
disadvantageous position as compared to the developing nations.

With Asia becoming the driver for growth, new capacities are coming up in the emerging economies like
China, India, and Thailand. Major producers in Europe/ USA/ Australia are rationalizing capacities or shifting
manufacturing facilities to cost advantageous regions.

With emergence of alternate substrata ( tetra pack, pet, plastics) especially for packaging edibles, the tinplate
industry globally, has had to address Substitution Threat and has been focusing on Light- weighting to
improve cost competitiveness (for example, it is estimated that beverage cans have become 35% lighter
over last two decades).

World-wide tinplate continues to have a strategic presence in portfolio businesses of major integrated flat
steel producers. For any integrated steel player, the Tinplate business balances the portfolio and offsets
the capacity with auto and construction businesses. Tinplate business, being dependent (70%) on foods/
beverages has lesser cyclicity when compared with auto and construction. Across the world, key players (CSN
Brazil, Corus, Arcelor Mittal, Bao Steel China) have also made strategic downstream investment in various
forms to defend and promote their leadership position in metal packaging.

3.4 Indian Tinplate Industry

Consumption of Tinplate in India is low i.e. approx. 0.42 kg/ capita compared to 10 kg/capita in many
developed nations, even a similar developing economy like China, consumes more than 1 kg/ capita. The
consumption in India is presently, estimated to be about 0.49 million tons.

Weak regulatory mechanism to enforce packaging laws has led to use of sub-standard imported tinplate
as also cans being re-cycled for multiple uses- example, in edible oils packaging, cans are used up to four
times and if as per existing laws only fresh tin cans were to be used, tinplate consumption would increase
manifold. Recognizing the weakness, the Government gazettes a Steel Quality control but later dropped its
implementation under pressure from can makers.

7
The Indian packaging industry is poised for growth. The rapidly growing GDP in India and changing lifestyle in urban
India is going to bring a boom in the packaging industry as a whole. Historical figures comparing Packaging Spend
per capita and GDP per capita shows that packaging spend grows rapidly once the per capita income crosses the USD
4000 per annum and India is now around that threshold.

India has strong GDP growth and a strong correlation exist between the rates of packaging growth and increasing
income level / economic growth. Also India has vast potential and perfect credentials “to be the food factory to the
world”, being the largest producer in the world of many food items. The Government of India has envisioned that
by 2015, the processed food industry in India may grow by three times. The demand of tinplate in India has reached
approx. 490000 MT in FY 09-10.

3.5 Consumer Awareness

Today cans have become such an integral part of our lives that we use them almost unconsciously. In
Foods, Beverages, Toys, Chemicals, Gifts, Household items, and a huge number other common and everyday
items cans are indeed part of our lives today. Other advantages:

 Tin cans are ecofriendly.

 Offers highest shelf life hence preferred by retailers.
 Food products is best packed & preserved is OTS cans.
 Excellent printability.
 Aroma & flavor retention.

80 FRESHNESS (%)
60

40

20
Tin Polythene Glass PET Tetrapack

Tin cans are ideal for packaging food products. The food is preserved, long-life (air tight packaging)
and fresh. The nutritive value remains.

8
 50
SAFETY
(%)
40

30

20
Tin Polythene Glass PET Tetrapack

Tin cans are safer, and coatings prevent the food from bacteria and UV rays, packaging preserves the taste and
aroma of the food.

ATTRACTIVENESS (%)
70

60

50

40

30

20 Tin Polythene Glass PET Tetrapack

Tin cans are made attractive by engraving labels, lacquered and printed soft drink cans are popular among youth.

3.6 SWOT Analysis of TCIL

SWOT analysis is an examination of the strength, weakness, opportunities and threats faced by a company
during its phase of operation. A SWOT analysis is important for TCIL to evaluate its current position
and formulate strategies to tackle its competitors.

9
3.7 Tinplate Products

 Oil Can (OC)

 Non-Oil Can (NOC)
 Open Top Sanitary Can (OTSC)
 Tin Free Steel (TFS)
 Double reduced Tinplate sheet
 Crown Cork
10
  Cold rolled coils
 Printed and lacquered sheet

BROCHURES

11
12
3.1 TCIL’s process flow

13
3.1 Manufacturing Process

14
3.8 Stages of Production

All tinplate originates as in the steel-making furnace (Tata Steel), where the proper chemistry for steel
is obtained to meet the specific needs of the end user. All tin mill products start their production
process in a Basic Oxygen Furnace (Tata Steel).

 Cold Rolling to produce TMBP Coils

 Electro- tinplating

CRM - Process Flow Diagram

Process Flow Diagram of Electrolytic Tinplating Plant

15
 3.9 Awards/Recognition for TCIL
(2015-16)

 Silver Award" in CCQC-Kolkata 2015.

 Excellent Award” in NCQC 2015 at Chennai.

 Merit Awards for “Best Theme Paper”, “Poster Contest” And “English Slogan” at INSSAN
National Convention –2015.

(2014-15)

 QC Team “Akarshan” & “Pragati” got certificate of Appreciation in 26th QC Circle Convention
(CII-Jharkhand State Level) – Dec’14.

 INSSAN – 3rd Prize in Hindi Slogan – Dec’14, Merit Award in English slogan, Hindi Poem
and Best evaluator Of suggestion.

(2013-14)

 Best Associated Company (TIS Group) in Safety Performance in FY'13.

 Quality Circle Teams "ANVESHAN" bagged Excellent Award, in National Competition for
Quality Circle (NCQC2013) Dec'-2013.

 CII (ER) Productivity Award Certificate of Appreciation for Significant Improvement in TQM
Mar'14.

 INSSAN Merit Prize for Best Evaluator of Suggestion Feb'14.

16
(2012-13)

 TCIL ' ANVESHAN' bagged Excellent Award , in National Competition for Quality Circle
(NCQC-2013), held during 20-23 Dec. '2013 at Techno India College of Technology, Kolkata.

 TCIL Received Certificate of Appreciation from CII in recognition of commendable efforts towards
significant improvement in Safety, Health and Environment in SHE contest 2012-2013 in the
category of large scale companies.

 TCIL 'AKARSHAN' quality circle team from CRM (E&E) department won '3 STAR' (Gold)
in international Quality Circle Convention at Kuala Lumpur, Malaysia.14th to 19th Oct 2012.

(2011-12)

 TCIL secured first position under 'Significant' category in CII Eastern Region Productivity Awards
2011-2012.

 Quality Circle Teams "SUDHAR" and "AKARSHAN" bagged Par Excellence (Gold Medal), in National
Convention on Quality Circles (NCQC-2011), which was held during 09-12 December, 2011 at
Hyderabad, organized by Quality Circle Forum of India, Hyderabad Chapter.

 TCIL received MERIT Prizes-INSAAN 2011

 Quality Circle Teams "SUDHAR" and "AKARSHAN" bagged Gold Medal, in Quality Circle Competition
(CCQC-2011) held on 20th September, 2011 at Taj Bengal, Kolkata organized by Quality Circle Forum of
India, Kolkata Chapter.

(2010-11)

 TCIL Commended “Certificate of Recognition” for CII(ER) Energy Conservation Award 2010-11.
17
 Quality Circle Team AKARSHAN bagged Excellent Award in 24th National Convention on Quality
Concept(NCQC-2010), which was held during 27-30 December, 2010, at the College of Engineering
(Autonomous Andhra University), Visakhapatnam (AP).

 TCIL has been conferred with the CII Exim Prize 2010.

 Quality Circle Team SUDHAR bagged SILVER Medal in the International Convention on Quality Concept
Circle Competition (ICQCC-2010) held on 12-15 October, 2010 at Hyderabad, organized by Quality Circle
Forum of India, Hyderabad.

 Quality Circle Team AKARSHAN bagged Gold Medal, (1st Position) in Quality Circle Competition held
on 21st September, 2010 at Taj Bengal, Kolkata organized by Quality Circle Forum of India, Kolkata
Chapter.

 TCIL received the recognition for sustained excellence.

 TCIL won the award in the Dare to try category TATA INNOVISTA 2010.

 TCIL certified under ISO: 22000 2005 Food Safety Management System.

18
 3.10 Vision, Mission and Strategic Goals of TCIL

Mission:

Service customer requirements of green packaging by offering reliable, cost-effective & value added tin
mill products.

Strategic Goals:

 Create and enhance value for the stakeholders through Growth and
Competitiveness.

 Reach status of supplier of choice for tin mill products in Asia.

 Establish as an exemplar in corporate sustainability.

19
  Create an exciting and safe work place for our employees.

3.11 TCIL’s Management Profile

Board of Directors as on 31st October 2015

Mr. Koushik Chatterjee Chairman

Mr. Anand Sen Nonexecutive Directors

Mr. Dipak Kumar Banerjee Independent Director

Mr. Ashok Kumar Basu Independent Director

Dr. Sougata Ray Independent Director

Mr. B N Samal Independent Director

Mrs. Atrayee Sanyal Nonexecutive Director

Mr. Tarun Daga Managing Director

Committees of the Board as on 31st October, 2015

Names of Committees Directors

Mr. Dipak Kumar Banerjee – Chairman Mr.

Audit Committee Ashok Kumar Basu
Dr Sougata Ray Ms
Atrayee Sanyal

Mr. Dipak Kumar Banerjee – Chairman Mr.

Nomination and Remuneration Koushik Chatterjee
Committee Mr. Ashok Kumar Basu

Mr. Ashok Kumar Basu – Chairman Mr.

Stakeholders Relationship Committee Anand Sen
Mr. B N Samal

Mr. Anand Sen – Chairman Dr

Corporate Social Responsibility Committee Sougata Ray
Mr. Tarun Kumar Daga

20
 Management as on 1st December 2015

Mr. Tarun Kumar Daga Managing Director

Mr. Chacko Joseph Chief Financial Officer

Mr. Santosh Antony Vice President Marketing & Sales

Mr. S Venkat Raman Deputy General Manager Works

Mr. Harjit Singh Chief (Corporate Services)

Dr. Atul Srivastava Chief (Medical Services)

Mr. Kaushik Seal Company Secretary

Share Holding Pattern in TCIL

21
 Category Shares held % of Shareholding
1. PROMOTERS HOLDING:
Tata Steel Ltd. 78,457,640 74.96

2. PUBLIC SHAREHOLDING

A.Institutions

Mutual Funds/UTI 9,317 0.01

87,339 0.08
Financial Institution/Banks
1,650 0.00
Insurance Companies
2, 50,823 0.24
Foreign Institutional Investors/FPIs
B.Non-Institution

Bodies Corporate 54, 34,597 5.19

Individuals-

Individual’s shareholders holding

Nominal share capital Up to Rs.1 lakh 1, 58, 05,334
15.1
1
Individual’s shareholders holding
Nominal share capital in excess 46, 19,513
4.41
Of Rs. 1lakh

Directors & their Relatives 1,00 0.00

0
Trusts
425 0.00

Total 10, 46, 67,638 100.00

22
Literature Review

23
 Gilbert and Reichert (1995)

Find that accounts receivable management models are used in 59 percent of these firms to improve working capital
projects, while inventory management models were used in 60percent of the companies. More recently Farrgher,
Kleiman and sahu (1999) find that 55percent of the firms in the S&P industrial index complete some form of a
cash flow assessment, but did not present insights regarding accounts receivable and inventory management, or the
variation of any current asset accounts or liability accounts across industries. Thus, mixed evidence exists concerning
the use of working capital management techniques. Theoretical determination of optimal trade credit limits are the
subject of many articles over the years (e.g. Schwartz 1974; Scherr 1996), with scant attention paid to actual accounts
receivable management. Across a limited sample,

Weinraub and Visscher (1998)

Observe a tendency of firms with low levels of current ratio to also have low levels of current liabilities.
Simultaneously investigating accounts receivable and payable issues, Hills, Sartoris, and Ferguson (1984) find differences
in the way payment dates are defined. Payees define the date of WCM insight across firms, industries, and time
can add to this body of research. Maness and Zietlow present two models of value creation that incorporate
effective short-term financial management activities. However, these models are generic models and do not consider
unique firm or industry influences. Maness and Zietlow discuss industry influences in a short paragraph that includes
the observation that, “An industry a company is located in may have more influence on that company’s fortunes than
overall GNP”

Eljelly (2004)

Elucidated that efficient liquidity management involves planning and controlling current assets and current liabilities
in such a manner that eliminates the risk of inability to meet due short-term the relation between profitability and
liquidity was examined, as measured by current ratio and cash gap (cash conversion cycle) on a sample of joint stock
companies in Saudi Arabia using correlation and regression analysis. The study found that the cash conversion cycle
was of more importance as a measure of liquidity than the current ratio that affects profitability. The size variable
was found to have significant effect on profitability at the industry level. The results were stable and had important

24
implications for liquidity management in various Saudi companies. First, it was clear that there was a negative
relationship between profitability and liquidity indicator such as current ratio and cash gap in Saudi sample examined.
Second, the study also revealed that there was great variation among industries with respect to the significant
measure of liquidity.

Bergami Robert (2007)

Analysis that international trade transactions carry inherently more risk than domestic trade transactions, because of
differences in culture, business processes, laws and regulation. It is therefore important for trade to ensure that
payment is received for good dispatched and that the goods received and paid for comply with the contact for sale.
One effective way of managing these risks has been for traders to rely on the letter of credit as a payment
method. However for exporters in particular, the letter of credit has presented difficulties in meeting the compliance
requirements the current rules that govern letter of credit transactions (UCP 500) have been review for the past
three years and an updated set of rules (UCP 600) is expected to be introduced on 1st July 2007. This paper
focuses on the changes mooted for 2007 and compares these main issues with the existing rules and other associated
guidelines and regulations governing this method of payment. This paper considers the implication to changes of
letter of credit transactions and the sharing of risk. Firstly the paper provides some background to letters of credit,
then comments on existing literature and models, and subsequently an analysis of the most important changes to the
existing rules, before reaching a conclusion. The conclusion is that the UCP 600 have not paid enough consideration
to traders and service providers and are likely to engender an environment of uncertainty for exporters in
particular.

Singh and Pandey (2008)

Said that working capital management is the management of current assets and current liabilities. Maintaining high
inventory level reduce the cost of possible interruption in the production process or of loss of business due to scarcity
of product, reduce supply cost and protects against price fluctuations. Granting trade credit favours the firm’s sales in
various ways. Trade credit can act as an effective price cut and incentives to customers to acquire merchandise at
time of low demands.

De Loof (2003)

Discussed that most firms had large amount of cash invested in working capital. It can therefore be
expected that the way in which working capital is managed will have a significant impact on
25
profitability of those firms. Using correlation and regression tests he found a significant negative
relationship between gross income and the number of days, accounts receivable, inventories and accounts
payable of Belgian firms.

Shin and Soenen (1998)

Highlighted that efficient working capital management was very important for creating value to
shareholders. The way working capital was managed had a significant impact on both profitability and
liquidity. The relationship between the length of net trading cycle, corporate profitability and risk adjusted
stock return was examined using correlation and regression analysis, by industry and capital intensity.
Pradeep Singh (2008)

Empirically analysed that a firm’s working capital consists of investment in current assets, which includes
short term assets, cash and bank balance, inventories, receivable and marketable securities. Therefore,
the working capital management refers to the management of the levels of all these individual current
assets. On the other hand inventory which is one of the important elements of current assets, reflect the
investment of the firms fund.

Vellanki S. Kumar, Awad S. Hanna, Tersa Adams (2000)

Conducted research and examined that the systematic assessment of working capital requirement in
construction project deals with the analysis of various quantitative and qualitative factors in which
information is subjective and based on uncertainty. This paper presents a methodology to incorporate
linguistic variables into workable mathematical propositions for the assessment of working capital using
fuzzy set theory.

What is Research Methodology ??..

The basic type of research used to prepare this project is descriptive. The study is mainly based on secondary
data which are already collected and available. These include internal sources within the company and
external sources like books and periodically published annual report of TCIL. Interaction with various
employees of costing department had a major source of information. The study is limited to five financial
year i.e. from 2011-2016. The data used in this study has taken from the financial statement and their
related schedules of TCIL Jamshedpur. Calculation of various ratios related to working capital (like current,
quick, debtor turnover, creditor turnover, cost sheet and net operating cycle) has done in this report to know
the liquidity position of the company and cash conversion cycle. Working capital requirement of TCIL for
next three year also projected in this report. Estimation of working capital for next three year is done
through CAGR method and also taken care of external factors (like; expansion plan of TCIL, raw material
availability and market study of steel sector).
26
TYPES OF RESEARCH METHOLOGY

These are some major finding i got to know during the study of working capital management at Tata steel.

1. TCIL takes working capital loan/cash credit from SBI, Union Bank of India, HSBC, and HDFC and
term loan from IDBI Bank Ltd, Union Bank of India, Allahabad Bank, State Bank of Hyderabad,
State Bank of Patiala.

2. TCIL uses Cash-Credit/Working Capital Term Loans facility and prefers it over short- term
loan. Cash-Credit Account is a primary method in which Banks lend money against the
security of commodities and debt. In TCIL, cash credit is secured by hypothecation of Raw
Materials, Finished Goods, W.I.P, General stores and Book Debts.

3. Bank follows certain norms while funding companies for working capital. And these norms are
made by committee recommendation. There are several committee report (Tandon Committee,
Daheija Committee, Chore Committee) and companies are supposed to follow one of the
committee report.

4. TCIL purchase some part of raw material from credit basis and remaining part from cash basis and
they follow 45 Days creditor policy. But some time it’s varying creditor to creditor. Again for
debtor its vary debtor to debtor. The minimum time period is allowed by TCIL to its debtor is
30 Days.

5. TCIL do not use EOQ method for ordering raw material. EOQ i.e. economic order quantity is
not done by the management. It is a very important part of inventory which is ignored. EOQ
can give the company adequate or optimum level of inventory.

6. Company’s operating cycle/cash conversion cycle is 26days. It shows the credibility of company.
Company has a good relationship with its creditors so, that they give a huge time period to TCIL

27
for paying them.

28
29